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- Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long—term impacts of such policies on the economy?Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?Analyze the graph below, showing the Gross Federal Debt as a percentage of GDP for the United States (1939-2019). Which of the following is correct? FRED d- Gre ederal Dea Percentof Gr Done Produd 116 2013 Pa S Sor O e Loa fe In 2019, the Federal Government of the United States had an accumulated debt/GDP higher than 100 %, meaning that the amount of debt accumulated over time is higher than the value of all goods and services produced in that year. The debt/GDP is always positive during this period, so the Federal Government of the United States incurred in budget deficits every year since 1939. From the mid-40s until the mid-70s, the debt/DGP was decreasing, meaning that the Federal Government. of the United States was running a budget surplus every year during those three decades. During the second half of the 1970s, the Federal Government of the United States was able to keep a balanced budget and, as a result, the debt/GDP was close to zero.
- "Discuss the Impact of Taxes on Household Savings in the United States"Refer to the following graph. Tax revenue Tax rate The economy is currently at point C. Tax revenue Cincreases; increases Cincreases; decreases Cdecreases; decreases Cremains unchanged; increases cremains unchanged; decreases when tax rateOnly typed answer and please don't use chatgpt Suppose the tax multiplier in an economy is -3. How will total spending (TS) change when taxes (T) increase by $300? Group of answer choices TS will decrease by $900 TS will decrease by $100 TS will increase by $900 TS will increase by $100
- 16. If consumers in a country spend 4/5 of their disposable income. If their governmentdecreases its spending by 55 trillion and in order to maintain a balanced budgetsimultaneously decreases taxes by 55 trillion. Calculate the effect of the 55 trillion change ingovernment spending and 55 trillion change in taxes on the country’s aggregate demand.15. If consumers in a country spend 3/4 of their disposable income. If their governmentincreases its spending by 75 trillion and in order to maintain a balanced budgetsimultaneously increases taxes by 75 trillion. Calculate the effect of the 75 trillion change ingovernment spending and 75 trillion change in taxes on the country’s aggregate demand.Asap
- hich of the following statements regarding a Laffer curve is the most plausible? Reducing a high tax rate will have the same effect on tax revenue as reducing a low tax rate. a. b. C. d. Reducing a tax rate can never increase tax revenue. Reducing a high tax rate is less likely to increase tax revenue than is reducing a low tax rate. Reducing a high tax rate is more likely to increase tax revenue than is reducing a low tax rate.a greatera smallerdecrease in government spendingdecrease in net taxesincrease in government spendingincrease in net taxesnono change in government spendingno change in net taxes10 eBook The diagram shows government expenditures and tax revenues for the fictional country of Mountainia. Currently, there is a recession in Mountainia. The country's leaders want to use tax-rate changes to create a cyclically adjusted budget deficit of $3 billion. a. Illustrate how the country's tax revenues will change after the government adjusts tax rates to create this cyclically adjusted budget deficit. Instructions: Use the tool provided 'T2' to illustrate the country's tax revenues after the tax changes are enacted. Government expenditures, G, and tax revenues, T (billions) $25 $20 $15 $10 $5 0 G $40 $80 $120 $160 $200 Real domestic output, GDP (billions) Tools T₂
